The world's shifting centre of gravity

IT IS not exactly news that the world's economic centre of gravity is shifting east. But it is striking how fast this seems to be happening. In a new study on the economic impact of urbanisation the McKinsey Global Institute, the research arm of the eponymous consultancy, has attempted to calculate how this centre of gravity has moved since AD 1 and how it is likely to move until 2025. Although the underlying maths (which involves weighting the approximate centre of landmass of a country by its GDP) has to be taken with a pinch of salt, the calculations show that the centre is rapidly shifting east—at a speed of 140 kilometres a year and thus faster than ever before in human history, according to Richard Dobbs, one of the authors of the study. The main reason for this is rapid urbanisation in developing countries, in particular China. As people are moving into cities many are becoming richer, driving further economic growth. Most of this growth will not occur in much-hyped megacities, such as Mumbai or Shanghai, but in what the authors call "middleweight cities". Few in the rich world would be able to identify these on a map. Ever heard of Foshan or Surat, for instance? (Hint: the former is China's 7th-largest city, the latter India's capital for synthetic textiles.)

So what do you see happening? I don't see why China's population problem is actually a problem. The Chinese gov't seems to be pragmatic and most likely they would either relax their one child policy or ease immigration law or find some innovation to deal with the issue, what they won't do is just ignore it. You are doing the same thing only from the other side. You are assuming that these countries are just going to stay static instead of pursuing policies or innovations to sustain or even speed up growth.

FYI Surat was one one of the richest cities in the world in the late medieval period and home to millionaires and billionaires long before the terms were even coined..... course colonialism and geography did it in but even today it is the center of the diamond trade

A few studies also show that while China and India had the highest GDP from around 650 B.C. to 1800 A.D., GDP per capita was higher in Europe for almost all that period. Only at the ending years of the Roman Empire and during the Black Death did Europe's GDP per capita lag that of the Empires of the East.

The fact that you don't see China's population problem as an actual problem shows that you have little knowledge of it. Even should they relax their one child policy, it will not lead to a reversal of their impending population decline, maybe only an extremely short delay.

A little known fact about China's one-child policy is that it only affects 36% of the population. And yet the entire country's TFR is only 1.56. What is even more surprising is that Beijing's TFR is 0.67 and Shanghai's is even lower at 0.6.

So couples are not even having one child even though they are allowed one and statistically speaking more than half can have at least two.

Demographics differs to other fields such as economics. We can estimate certain demographics extremely accurately. For instance, we can estimate who will be aged 65 and older in China in 2050 because these people have already been born.

The people who turn 65 in 2050 were born in 1985. In 2050 over 1/3 of China will be aged over 60 - that's almost 500 million. These people have been born already so this can be predicted.

The working age cohort can be predicted quite accurately over the next decade (it will start to fall in the next year or so). The 0‐14 cohort can be predicted but with less certainty as this has yet to be born.

What doesn't bode well though is that this has dropped every year and will continue to. The less 20-­40 year olds you have, then less children you have. And this age group is just starting its decline.

Demographics is a study in absolute facts and hence can be very predictable.

Here's a small comparison:
China's 0-14 age cohort dropped from 26.6% of the population to 16.6% in 10 years (census data 2000 and 2010).
Australia's 0-14 age cohort dropped from 20.5% of the population to 19.3% in 10 years (census data 2001 and 2011).
US's 0-14 age cohort dropped from 21.4% of the population to 19.8% in 10 years (census data 2000 and 2010).

These 0-14 year olds are the next generation of workers and parents. The less you have, the less workers you have. The less you have, the less parents you have and therefore even less future 0-14 year olds.

Demographic decline is extremely difficult to reverse as it compounds.

Not sure if this is historically accurate. Newer historians are coming out with the analysis that the West only started to supersede the East in terms of GDP per capita after the 1700s. Even more traditional historians believed China had been the richest country per-capita wise until the 1400s.

Whenever a trend has continued for a while (e.g., a country has had a few good decades), those afflicted feel compelled to draw a graph and continue the line into the future (using a ruler or giving it an elegant exponential shape).

This is childish nonsense of course.

Although you shouldn't make predictions (and much less so about the future), sometimes the near end of the trend is obvious enough. India, e.g., does not have enough resources or space to catch up with America, no matter how many people it will give birth to (many of the smartest will emigrate). China might (despite a soon decrease in population), but cannot possibly sustain a similar speed of growth as during the last decades.

The world and the factors wealth depends on are not the same as thousands of years ago. You (@ connect the dots) cannot look at China's GDP of a time when it consisted mainly in rice output and America's when native Americans were hunting buffaloes and then assume this was the natural "equilibrium". Native Americans remained far behind the possibilities they theoretically had.

It appears that the "centre of gravity" refers to that of the surface areas of the countries concerned. That may be why the economic c.g. was so near the Arctic Circle when economic activities were mainly in the Northern hemisphere during the 20th century.
(btt1943, mtd1943)

I have my reasons for not seeing it as a problem.
1) You are extrapolating until around 2050 when you think pop will be a problem and then stopping there and saying this will keep China down. BUT you forget that Chinese policy makers have access to the same data and so would take whatever steps to ensure future stability. I don't know what they'll do but I do know they won't just do nothing. Also we don't know what will happen beyond 2050.
2) the Malthusian paradox: The less people there are relative to the previous year the more purchasing power you have. My words. Someone elses words "This is the confusing paradox: Lifting people out of poverty not only slows population growth, it also enables consumption." http://unu.edu/articles/population-health/the-population-paradox

3)Tech that replaces humans. We don't know what new technologies will be around by the year 2050. Last year I never thought something like google glass would be something I could one day go into a store and buy: http://www.youtube.com/watchv=JSnB06um5r4
The point of that example is to show that technology develops in interesting and innovative ways. I mean, really, glasses? Who would've thought this would be the next big innovation for glasses which have been around for 100's of years with no major innovations then BAM!!! augmented reality gets slapped on top of it.

4) The United States has the same thing going on. The only reason the population is going up is because of immigration. How do you know that by 2050 people will still want to come here? If conservatives get their way no one will want to come here.

So to sum up population may not be an issue because of: policy changes, possible immigration, tech + idea innovations, Malthusian paradox, and the relative decline of the U.S.

I'd be interested to see how the economists did their calculation on GDP and GDP per capita for periods in history that there were essentially no monetary comparison between different cultures. Not doubting your fact given resource per capita wise Europeans would enjoy more natural resources in my opinion, but wanting to know more.